1 Grand Challenges for Social Science Nick Bloom, Stanford
& NBER
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2 Does management matter for growth and development? Can we
improve work life balance without damaging growth?
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3 One of the most striking facts in economics is the spread of
performance across countries and firms Source: Jones and Romer
(2009). US=1
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One of the most striking facts in economics is the spread of
performance across countries and firms TFP across plants in
manufacturing Source: Hsieh and Klenow (2008); mean=1
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5 Management could be a factor rich countries do appear to have
much better management practices Average country management score,
manufacturing firms 100 to 5000 employees (Source: See Bloom and
Van Reenen 2010, measures monitoring, targets &
incentives)
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6 US India Density Firm level management score, manufacturing
firms 100 to 5000 employees (Source: See Bloom and Van Reenen 2010)
And the distribution of management practices across firms looks
like the distribution of productivity
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But does management really matter? The belief it does is long
founded in fact Francis Walker, the founding president of the AEA,
highlighted management in his 1887 QJE paper The source of business
profits But the evidence base is frankly very weak, because of the
reliance of evidence on case-studies and surveys Syversons (2010)
productivity survey stated on management Perhaps no potential
driver of productivity differences has seen a higher ratio of
speculation to actual empirical study than management
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1) So I encourage the NSF to promote research on investigating
the causal impact of management on performance This is a massive
question given the impact of productivity on growth and development
2) And, I think this needs to exploit the tools of detailed
measurement, natural experiments and field experiments
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9 Does management matter for growth and development? Can we
improve work life balance without damaging growth?
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10 Policymakers are increasingly thinking about regulating
issues around work-life balance The EU regulates working hours to
average 48 hours per week, with some countries (France) restricting
this to 35 hours Many European countries are also increasing
maternity and paternity i.e. Sweden offers 16 months paid joint
leave In the US working hours are currently not regulated, and
statutory maternity and paternity leave is limited to 12 weeks
unpaid.
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11 But US policy could change - for example the Obamas launched
a CEA report on work life balance
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12 The report highlights that changes in families and the labor
market are increasing work-life pressures
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Working hours particularly long in the US
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14 US employers offer limited workplace flexibility
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So is this bad should the US regulate on work life balance?
Amazingly, it appears nobody really knows Having been consulted on
the CEA report it was clear the evidence base on this is extremely
poor 15 Source: Executive summary, CEA report (2010)
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The evidence is poor because what currently exists is again
case study or survey based 16 Bloom, Kretschmer and Van Reenen
(2010), Worklife balance, management practices and productivity, in
International differences in business practices, eds. Freeman and
Shaw, published NBER
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Given these policies impact millions of people and firms,
building an evidence base is essential I suggest using measurement,
natural experiments or field experiments to evaluate the causal
impact of WLB policies 17 An example is an experiment Im running on
a 10,000 employee Chinese firm, randomizing whether individual
employees are allowed to work from home and part time (note this is
fully funded)
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18 So far we find no productivity impact and some (initial)
drop in attrition but its only one firm, in only one industry, in
China. Normalized daily phone calls
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1) I encourage the NSF to support research to fill a major gap
in an important policy area - the causal impact of work-life
balance measures 2) Again, I think this needs to exploit some of
the tools of economics, around measurement, natural experiments and
field experiments.